MetLife Dodges Class Action Over Life Insurance Overcharges

A Florida federal judge has dismissed a class action lawsuit accusing MetLife Inc. subsidiary Metropolitan Tower Life Insurance Co. of overcharging customers for their life insurance policies, finding that the plaintiff was barred from taking legal action by an earlier class action settlement involving similar claims.

Plaintiff Philip D. Lucas initially filed the class action lawsuit in 2011 on behalf of a class of individuals who purchased or owned certain MetLife insurance policies. Lucas claims that MetLife promises policyholders that the monthly cost of insurance rates (COTI) are determined based on age, sex and rating class. The class action claims that MetLife breached its contracts with customers by improperly calculating monthly charges, resulting in policyholders being subject increased rates and overcharges. Lucas argues that these increased rates and overcharges amount to the wrongful taking of customer funds, a claim that he says is not barred by the terms of a MetLife Insurance class action settlement that was reached in 1999.

According to the class action lawsuit, Lucas purchased a “Flexible Premium Life Insurance Policy” from MetLife in 1988. His policy had an initial face amount of $50,000. His life insurance policy reportedly falls within the 1999 settlement definition of “permanent life insurance policy,” and the date he purchased the policy fell within the settlement class period. Because he qualified for membership in the MDL class, he was allegedly mailed a notice about the MetLife class action settlement with information about how to exclude himself from the class. He reportedly did not opt out.

The parties previously stipulated a stay on the new MetLife class action lawsuit pending a decision by U.S. District Judge Donetta W. Ambrose, who presided over the multidistrict litigation (MDL) proceedings, on whether Lucas’ claim was barred by settlement and release. The judge lifted the stay in June, leaving the Florida court to determine whether the claim is barred by the 1999 settlement.

Lucas then filed a second amended class action, which included allegations that MetLife deducted unauthorized expenses in excess of the 9 percent premiums paid against the policies and that MetLife failed to adjust the monthly COTI rates to reflect the expected mortality rates for putative Class Members.

MetLife argues that the class action lawsuit was barred by the 1999 settlement agreement. Further, MetLife argues that his claims fail as a matter of law. U.S. District Judge Sheri Polster Chappell agreed with MetLife and dismissed the class action lawsuit.

“While Lucas argues that there is no similarity between Plaintiff’s claim and the factual predicate underlying the settlement of the Sales Practice Litigation MDL, the court does not agree,” Judge Chappell said in her order to dismiss the class action lawsuit. “In this case, Lucas’ claim arises out of the policy which made him a member of the settlement class during the class period and he seeks to challenge a charge which he is barred from challenging by the release.”

Lucas is represented by John J. Schirger of Miller Schirger LLC; Patrick J. Stueve of Stueve Siegel Hanson LLP; and Phillip Freidin, Manuel L. Dobrinsky and Randy Rosenblum of Freidin Dobrinsky Brown & Rosenblum PA.

The MetLife Life Insurance Overcharge Class Action Lawsuit is Philip D. Lucas v. Metropolitan Tower Life Insurance Co., Case No. 2:11-cv-00467, in the U.S. District Court for the Middle District of Florida.

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